European stocks higher
On Tuesday European stocks pushed higher, while bonds across the region followed a rise in Treasuries after the European Central Bank was said to be likely to make only small adjustments to its guidance on monetary policy next year.
Automakers and insurance companies led the advance in the Stoxx Europe 600 Index. German shares outperformed even as the country’s political stalemate continued. Earlier, stocks in Asia recovered some of their recent losses, with Chinese equities rallying as investors reassessed a crackdown on shadow banking that had shaken confidence. The euro drifted after dropping the most in three weeks on Monday, and the dollar nudged lower.
Meanwhile, sterling was steady and gilts advanced amid reports Prime Minister Theresa May has the backing of ministers to offer the European Union more money to break the Brexit deadlock. Turkey’s lira hit a record low against the dollar but pared some of the drop after its central bank tightened liquidity.
Investor focus stayed on Europe after officials said the ECB is likely to make multiple small adjustments to its guidance on monetary policy next year rather than any major change in language as it ends quantitative easing. Political developments in Germany are being closely watched even though some have concluded that economic growth won’t be threatened by the collapse in talks between Merkel and potential coalition partners. The German Chancellor said she would prefer new elections if she can’t put together a majority.
In the U.S., confirmation that Federal Reserve Chair Janet Yellen will leave the board in February creates a fourth vacancy for President Trump to fill, making it trickier for investors to bet on the central bank’s interest rate trajectory next year. While the Thanksgiving holiday gives traders an excuse to pause, equities are heading into the end of the year near their peaks, with investors optimistic about global growth and company earnings.
The Stoxx Europe 600 Index advanced 0.3 percent as of 11:37 a.m. London time, the highest in more than a week. The U.K.’s FTSE 100 Index increased 0.1 percent to the highest in a week. Germany’s DAX Index climbed 0.5 percent to the highest in more than a week. Japan’s Nikkei 225 Stock Average jumped 0.7 percent to the highest in more than a week. The MSCI Asia Pacific Index jumped 0.9 percent to the highest in more than a week. The MSCI Emerging Market Index increased 1 percent to the highest in more than six years.
West Texas Intermediate crude fell 0.6 percent to $56.09 a barrel. Gold increased 0.1 percent to $1,278.21 an ounce. Copper gained 0.4 percent to $3.13 a pound, the highest in more than a week.